Iran Oil: SCI, INSA seek sovereign guarantee to domestic ships

Country's largest Shipping Company, SCI, along with shipowners body INSA, has requested the government for sovereign guarantee to domestic shipliners for transport of crude oil from Iran, which is facing sanctions from the US and Europe.

"We have approached the Petroleum and Shipping Ministries to take up the matter of sovereign cover to domestic vessels with the Finance Ministry, in the wake of EU sanctions," SCI Chairman and Indian National Shipowners Association (INSA) President S Hajara told PTI.

Shipping Corporation and INSA has requested the government to ask General India Insurance and other domestic insurance companies to work out the insurance cover, he said.

"We are hopeful to get a reply from the government addressing our concerns very soon, may be by next week. Besides the government, we have also written letters to the European Union to exempt Indian shipliners from sanctions and continue to extend insurance cover to them," he added.

INSA CEO Anil Devli said the letter to EU states that not providing insurance cover would be against the International Convention on Civil Liability for Oil Pollution Damage.

Indian ship liners, including state-run SCI, have expressed apprehensions that they will lose EU insurance coverage for their oil tankers operating in Iran from July 1, when European insurers will be prohibited from indemnifying ships carrying Iranian oil under the sanctions.

Last month, the government had said it is considering providing sovereign guarantee to domestic shipping liners for import of crude oil from Iran.

The sanctions prohibit EU-based entities from providing insurance and guarantees for transportation of oil from Iran while most of the Indian shipping lines take protection and indemnity cover (P&I) mainly from them.

SCI operates about 40 tankers to supply crude oil from Iran. Apart from SCI, companies like Great Eastern Shipping and Mercator Lines have contracts with state-run oil companies, like Indian Oil and Hindustan petroleum to import crude.

Indian firms are likely to be worst-hit by sanctions in Asia as neighbouring China and Japan fleets are covered by their domestic providers.